I wanted to know your thoughts on how I should be investing my super. I’m 37 and have always invested in high growth but was recently told by a “financial adviser” that I should change to conservative as the market is likely to re-adjust in the next few years as the growth in the American share market is unsustainable. He said I should change to conservative until this happens to protect my super. What are your thoughts? I don’t like the strategy at all. For starters, you have more than 20 years before you can access your superannuation and will certainly experience upturns and downturns during that time. It is well accepted that it is virtually impossible to time the market, and those who attempt it often get burned. Remember all those “investors” who cashed in their superannuation when Donald Trump became president because they believed world markets would crash? So, forget about trying to time the market, and hang in there. When markets do fall, as they will regularly, your superannuation will continue to be invested on a regular basis which means you can take advantage of the proven strategy of dollar cost averaging. My mother, aged 85, has decided to sell her home to downsize into Seasons age care (which is a rental). Her home will probably only bring around $325,000 once sold and she has no other investments apart from a term deposit of $7000. Will she lose part of her pension as this money will go towards the rental she pays and in future, any other care she will need? Aged Care Guru, Rachel Lane, says: ‘‘The situation you describe is the quintessential downsizers dilemma – freeing up just enough money to give you a pension headache. The good news in your Mother’s situation is that as a renter she is a non-homeowner, which means she can have up to $465,500 in assets before she loses pension under that test, which is the harshest of the two. The other piece of good news is that she will be eligible for up to $134.80 a fortnight in rent assistance. The bad news isn’t that bad. If she puts all of the $325,000 in financial assets (bank accounts, term deposits, shares etc) her pension will be around $805 per fortnight and if she gets a Home Care Package she will also need to pay an income tested care fee of around $4 per day. It’s an income test problem. Some simple strategies such as purchasing an annuity, investing via a trust and possibly pre-paying a funeral or purchasing a funeral bond (or a combination of these) could solve the problem. Getting it right requires specialist advice.’’ I am 62 and am struggling to find employment. My wife and I owe $180,000 on our home worth $650,000. We also have an investment property in Sydney worth around $1million with an interest only loan of $380,000. My super is worth $220,000, and my wife’s super is worth $100,000. She earns $65,000 a year in full-time work. Can I withdraw all my super and use it to pay off my house? Having done so can I return to the workforce without incurring the wrath of the government. Is there a cooling off period between withdrawing my super and seeking employment? Is withdrawing my super and paying off my home a sensible thing to do? As you have reached the age of 60, and are currently unemployed, there are no restrictions on access to your super, and you are free to seek work if you wish, and start to contribute to super if you do. As you now have total flexibility in regard to your super, I think your best strategy is to leave things be and a make withdrawals from your super as necessary to make your house repayments. Hopefully, the earning rate on your superannuation, will be higher than what you are paying on your housing loan. Recently you advised someone that they could claim rates to reduce their capital gains on a vacant property. We sold a block of land five years ago and were told by the accountant we could not claim the rates and land tax. As we had owned the property since 1987 it was a considerable amount. Which answer is correct? In order to be able to add costs such as rates and interest to a property which has never been income producing, it needs to have been acquired after August 20, 1991. Therefore your accountant and I are both right. I am interested in the definition of ‘‘personal exertion’’ – as in $125 a week not affecting age pension. What is this about? To encourage pensioners to earn money while they are retired there is a “work bonus” which allows pensioners to earn a specified amount without affecting their pension under the income test. In the recent May budget this was increased to $300 a fortnight and includes income from personal exertion and self-employment. The term “personal exertion” means income generated from your own efforts such as paid work – it does not include passive income such as dividend or rents.

Ask Noel: Timing, or time in?

I wanted to know your thoughts on how I should be investing my super. I’m 37 and have always invested in high growth but was recently told by a “financial adviser” that I should change to conservative as the market is likely to re-adjust in the next few years as the growth in the American share market is unsustainable. He said I should change to conservative until this happens to protect my super. What are your thoughts?

I don’t like the strategy at all. For starters, you have more than 20 years before you can access your superannuation and will certainly experience upturns and downturns during that time. It is well accepted that it is virtually impossible to time the market, and those who attempt it often get burned.

Remember all those “investors” who cashed in their superannuation when Donald Trump became president because they believed world markets would crash? So, forget about trying to time the market, and hang in there. When markets do fall, as they will regularly, your superannuation will continue to be invested on a regular basis which means you can take advantage of the proven strategy of dollar cost averaging.

My mother, aged 85, has decided to sell her home to downsize into Seasons age care (which is a rental). Her home will probably only bring around $325,000 once sold and she has no other investments apart from a term deposit of $7000. Will she lose part of her pension as this money will go towards the rental she pays and in future, any other care she will need?

Aged Care Guru, Rachel Lane, says: ‘‘The situation you describe is the quintessential downsizers dilemma – freeing up just enough money to give you a pension headache. The good news in your Mother’s situation is that as a renter she is a non-homeowner, which means she can have up to $465,500 in assets before she loses pension under that test, which is the harshest of the two. The other piece of good news is that she will be eligible for up to $134.80 a fortnight in rent assistance. The bad news isn’t that bad. If she puts all of the $325,000 in financial assets (bank accounts, term deposits, shares etc) her pension will be around $805 per fortnight and if she gets a Home Care Package she will also need to pay an income tested care fee of around $4 per day. It’s an income test problem. Some simple strategies such as purchasing an annuity, investing via a trust and possibly pre-paying a funeral or purchasing a funeral bond (or a combination of these) could solve the problem. Getting it right requires specialist advice.’’

I am 62 and am struggling to find employment. My wife and I owe $180,000 on our home worth $650,000. We also have an investment property in Sydney worth around $1million with an interest only loan of $380,000. My super is worth $220,000, and my wife’s super is worth $100,000. She earns $65,000 a year in full-time work. Can I withdraw all my super and use it to pay off my house? Having done so can I return to the workforce without incurring the wrath of the government. Is there a cooling off period between withdrawing my super and seeking employment? Is withdrawing my super and paying off my home a sensible thing to do?

As you have reached the age of 60, and are currently unemployed, there are no restrictions on access to your super, and you are free to seek work if you wish, and start to contribute to super if you do. As you now have total flexibility in regard to your super, I think your best strategy is to leave things be and a make withdrawals from your super as necessary to make your house repayments. Hopefully, the earning rate on your superannuation, will be higher than what you are paying on your housing loan.

Recently you advised someone that they could claim rates to reduce their capital gains on a vacant property. We sold a block of land five years ago and were told by the accountant we could not claim the rates and land tax. As we had owned the property since 1987 it was a considerable amount. Which answer is correct?

In order to be able to add costs such as rates and interest to a property which has never been income producing, it needs to have been acquired after August 20, 1991. Therefore your accountant and I are both right.

I am interested in the definition of ‘‘personal exertion’’ – as in $125 a week not affecting age pension. What is this about?

To encourage pensioners to earn money while they are retired there is a “work bonus” which allows pensioners to earn a specified amount without affecting their pension under the income test. In the recent May budget this was increased to $300 a fortnight and includes income from personal exertion and self-employment. The term “personal exertion” means income generated from your own efforts such as paid work – it does not include passive income such as dividend or rents.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance.